Parliament has passed legislation changing how the Cayman Islands handles mutual legal assistance requests from the United States in criminal matters.
The Mutual Legal Assistance (United States of America) Amendment Bill, 2026, was presented to members for its second reading on 2 October.
The bill transfers responsibility for the Cayman Mutual Legal Assistance Authority from the chief justice to the attorney general and introduces limits on the authority’s liability for damages, consequential loss and legal costs.
On presenting the bill, Attorney General Samuel Bulgin said the changes would update the framework governing cooperation with the US under a 1986 treaty between the US, the United Kingdom and Cayman.
The treaty provides for assistance in criminal matters including serving documents, taking testimony, executing search and seizure requests and immobilising criminal assets.
“It is a very useful international instrument, which enhances the Cayman Islands’ reputation as a jurisdiction committed to tackling serious crime including serious financial crime,” Bulgin said.
The bill would allow a person to recover damages or consequential loss resulting from the authority’s execution of a US request only if the authority had acted in bad faith.
“The only circumstances in which a person would be able to recover for damages or consequential loss suffered as a result of the execution of a request by the Cayman authority is where it can be shown that the actions of the authority were in bad faith,” Bulgin said.
Legal costs would be treated differently, members of parliament heard during the presentation of the bill.
A claimant would not have to establish bad faith but would need to show the Grand Court that failure to recover the costs would cause undue financial hardship or that the Cayman authority had acted unreasonably in the proceedings.
Any adverse costs award would be capped at CI$50,000.
“I consider that clause 8 of the bill strikes a reasonable balance between protecting the public purse and ensuring that persons who may be the subject of a notice issued by the Cayman Authority are able to have reasonable access to the court,” Bulgin said.
He said the provision would not prevent challenges to the authority’s actions, adding: “They shouldn’t be a sort of a blanket barrier to access to justice.”
The proposed liability protections prompted questions about how the rules would apply where a search warrant used to execute a US request was later found to be defective.
Opposition member Christopher Saunders questioned the transfer of responsibility from the judiciary to the executive, saying it “usually raises an alarm for me”.
He said his research indicated the proposed structure was consistent with arrangements in other jurisdictions.
Meanwhile, opposition member Roy McTaggart supported the bill and described it as “quite straightforward”.
He said it modernised the law, redistributed functions between the Attorney General and Solicitor General and introduced liability protections for the Cayman authority.
“We have absolutely no issue with the amendments. We are happy to support the bill when the vote is taken,” McTaggart said.
Bulgin said Cayman would generally be required under the treaty to act on US requests except in limited circumstances.
“It is only in very exceptional circumstances… that they would be able to refuse a request,” he said.
He said failing to execute a request could have consequences for Cayman.
“The hope, of course, is that it won’t happen, because if that is so, then clearly it can have reputational problems for the jurisdiction,” Bulgin said.
Bulgin said during the debate that the government would examine the legal costs provision against provisions in Jersey before committee stage.
The bill subsequently moved through committee stage without amendment, passed its third reading and was approved on 5 October.
